Applications: Battery Energy Storage Systems (BESS)

Virtual Power Plants VPPs can help reduce load on the grid, but its participation is largely dependent on regional policies OVERALL

A Virtual Power Plant VPP, also known as a Distributed Power Plant) is the coordinated charge or discharge of stationary energy storage assets to act as a larger BESS asset on the grid. VPPs are typically deployed using large numbers of residential- or C&I-scale battery products. These systems are often owned by third parties and participate in programs where the coordinator compensates the battery owners. In return, the coordinator manages the fleet of assets to participate in large-scale markets, such as utility capacity markets, which individual assets cannot access.

ENTIRE MARKET INCL. ALL FLEXIBLE LOADS Up to 2024, the NA market contains already more than 33 GW of flexible loads managed via VPP (incl. not only batteries). Some of the top VPP aggregators operating in this space are:

CPower Energy: 7 GW Voltus: 7 GW Enel NA: 5 GW

BENEFITS

VPPs can provide grid services, ensure market participation by consumers, reduce grid congestion and provide additional revenue streams for consumers who want to participate in the energy transition. Since they are distributed assets, they do not rely on time-consuming interconnection issues, and are desirable to utilities since they are reducing demand across the grid without introducing additional stresses at specific points.

CHALLENGES

The success of VPP is dependent on the regulatory, policy and market rules. A positive example is the program which was launched by Tesla and PG&E. The formed VPP delivered 100 MW of power in July 2024 which limited the need to deploy fossil-fuel peaker plants. However, many utilities do not have markets or market rules that allow for VPPs to participate in these locations.

Source: IEA, Guidehouse Insights

FOCUS ON RESIDENTIAL STORAGE Certain manufacturers of residential BESS products have offered VPP participation as a voluntary, compensated program for their users. Some notable publicized examples of the larger VPP deployments are shown here:

40 MW / September 2024 / Texas, US ~100 MW / July 2024 / California, US 32 MW / July 2024 / California, US

Extracted from the PDF; charts and images may read imperfectly.